A and B are partners sharing profits in the ratio of 2 : 1. C is admitted for the 1/4th share of profits, who brings ₹20,000 as capital. After all adjustments related to goodwill, revaluation of assets and reassessment of liabilities etc, Capital of A and B are ₹45,000 and ₹15,000 respectively. It is agreed that partners capitals should be according to the new profit sharing ratio.
Determine the new capital of B.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹20,000
The capitals are to be in the new profit sharing ratio, so C’s capital for his 1/4 share fixes the total capital of the firm.
C gets 1/4 from A and B in their old ratio 2:1:
Remaining share = 1 − 1/4 = 3/4
A = 3/4 × 2/3 = 2/4
B = 3/4 × 1/3 = 1/4
New ratio A : B : C = 2 : 1 : 1
Total capital = ₹20,000 × 4/1 = ₹80,000
B’s new capital = ₹80,000 × 1/4 = ₹20,000
B’s adjusted capital is ₹15,000, so B brings in ₹5,000; A’s new capital is ₹40,000, so A withdraws ₹5,000.
NCERT (2026-27 edition):
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